I'm not happy with the prospect of this merger, but I honestly don't understand why spectrum matters here. If all 4 companies used the same spectrum, would you then be OK with it?
There is a strong incentive for me to use a GSM phone over a CDMA phone because the former works in the majority of the rest of the world. So if all the GSM phones sold in the States were sold by AT&T, it is likely that I would be getting a worse deal then I would otherwise.
It's just one way in which AT&T and Verizon do not sell directly substitutable goods.
Yes. The carriers currently certify and subsidize devices for their network that are designed to work only on the spectrum that they own. This creates customer lock-in because (i) devices are expensive and (ii) if you want a subsidy, you sign a two year agreement.
Another reason is that (iii) available spectrum in finite. If a single device could work with all four carriers on the same shared spectrum, then they would need to compete for your business on price and customer service quality. When each carrier has spectrum independent of the others, they also compete on who owns rights to the best spectrum band, who has the best infrastructure built-out and who has the best devices.
Spectrum is a sparse and valuable asset that isn't easy to acquire control of - you generally never want one company in complete control of such assets, especially when it can be used for anti-competitive means. I believe having ATT control all GSM spectrum (control is loosely equivalent to 'own' here -- technically ATT doesn't 'own' it but for all practical purposes it does) would be disastrous if other wish to acquire/use spectrum for services related to what ATT offers.
True. And I'd agree that GSM is probably more valuable than CDMA as it is what most of the rest of the world uses, as has been pointed out too. Thanks for that.
I wonder now if people would be equally as upset by a Verizon/Sprint merger as it would effectively reduce the CDMA ownership to one company in the same way.
